A Sarasota Scenario
One Florida developer's battle to build affordable housing.
Sarasota, Fla., is one of the fastest-growing metro areas in the country. Most visitors see only its wealth -- the high-rise waterfront condos, white beaches and thriving arts district. The wealth is real enough. In recent years, half of all new residents (mainly retiring baby boomers) paid cash for their new housing. But for people working in low-end service jobs, Sarasota is a challenging place to live. Most of the city consists of single-family homes, so rental prices for multifamily working-class units are high and rising. Incomes, in contrast, have stagnated. Fifty percent of families with children in Sarasota County qualify for the reduced-price school lunch program. Ten percent of county families use food banks on a monthly basis. This is the demographic that Harvey Vengroff is targeting.
Vengroff, who is 75 years old, came to Florida from Long Island, where he ran a successful debt collection agency, an undertaking that gave him an unvarnished view of human nature. It also led to the realization that many of his employees wanted to live near the places where they worked.
Vengroff moved to Sarasota in 1989, after the mayor promised to help him find a waterfront property for his business. He started buying real estate in marginal areas and soon developed a specialty -- converting old motel rooms into small apartments with kitchenettes. These units were affordable -- renting for around $600 a month -- although they weren’t very nice. They were also entirely unsubsidized and extremely profitable. (Vengroff says his profit margin on such conversions is around 40 percent.)
In 2015, Vengroff decided to use his know-how to build Sarasota’s first large-scale affordable apartment building complex, one that would also be unsubsidized. He planned to build 398 units in five six-story buildings. The units would be small. Rental prices would range from $640 to $925 a month. Almost immediately, he ran into problems. County commissioners feared that such small, inexpensive units might be substandard. They suggested annual inspections to make sure they were safe. The city also informed him that he could not simply cut down trees on his eight-acre property. “The place used to be a lumberyard. It’s entirely paved,” he says incredulously. “Over the years I guess seeds have fallen and grown up through the pavement, but they want us to take a picture of each one and send it to the lab. That would cost a couple thousand dollars to do. It’s stupid.”
Sarasota, he concluded, has a problem with building large-scale housing for the working poor. “The city has a feeling that if you put too many poor people in one place -- too many working-class people in one place -- it’s a ghetto.”
Eventually, says Vengroff, he just gave up. “We spent $175,000 to do an education study, to do a traffic study, to do all the rest of the crap they asked for, and they keep asking us to do more stuff all the time.”
Not surprisingly, City Manager Tom Barwin has a different take on things. Barwin says the city has worked patiently with Vengroff, doubling the allowable density for the site (and, Barwin notes, its value) and trying to streamline the project at every turn. As for the trees, “we had our arborists work with him to show his team how to save the trees and minimize their cost.” In fact, both Barwin and Vengroff speak highly of each other. But their world views simply don’t align. Barwin operates in a world where developers building big projects comply with complex codes. Vengroff does not. Developing a big affordable housing project from scratch in downtown Sarasota is a different proposition than converting an old motel. It makes sense that that is the case. It’s also, in a sense, the problem.
Barwin understands that more affordable supply is necessary. He’s aware of the need to have more worker housing near service jobs. The county recently began to explore the ideas other places are trying -- a density bonus (a form of inclusionary zoning), or waiving environmental impact fees for affordable housing. However, until or unless cities such as Sarasota and the Harvey Vengroffs of the world find a way to come together, the affordable housing crisis in America’s fastest-growing cities is likely to continue.